Friday, August 27, 2004

"Alarm bells ring" about Duisenberg

Wim Duisenberg, the former Governor of the European Central Bank, who had been edged into retirement by the French government in defiance of the provisions made in the Maastricht Treaty, has been raising eyebrows. This time the problem is not his wife, a colourful figure, to put it at its most polite, but his eccentric interpretation of the rules of engagement.

The ECB, as all financial institutions, requires a “cooling off period” of a year from all its board members , to prevent possible conflicts of interest. This rule, apparently, was scrupulously adhered to by former Vice-President Christian Noyer, who waited that year before becoming Governor of the Bank of France.

Not so Mr Duisenberg. Seven months after leaving his position with the European Central Bank, on May 14 of this year, he was appointed as a strategic advisor to the German banknote printers Giesecke & Devrient’s board of directors. A month afterwards he joined the boards of Rabobank and KLM/Air France.

There seems to have been some disquiet in the ECB governing council at such blatant disregard of the rules, though the spokeswoman loyally defended Duisenberg. The only one of those jobs that had needed formal approving was the one with Rabobank and that had been applied for and given. The other two positions were personal ones and did not need any clearance by the ECB. Most people would regard this as a piece of sophistry.

The chairwoman of the European Parliament’s economic and monetary committee intends to raise the subject in their first session with the present Governor of the ECB, Jean-Claude Trichet. Though what M Trichet can say beyond a Gallic shrug, it is hard to work out.